Radical action is needed to solve Scotland's rural housing crisis

There is often a lazy assumption made that the principal cause of the problem is the numbers of rural houses in second home ownership. In the early days of the Scottish Parliament, Dr Mark Bevan, of the centre for housing policy at York University, undertook an analysis of the situation on behalf of Communities Scotland. His conclusions are still valid today. High concentrations of second home ownership can cause difficulties in some areas but not in others.

More recently the blame has come to include high numbers of short-term letting properties.

Bevan and other commentators point out that second home owners can make a generous contribution to local economies, bringing investment and spending power to fragile communities. Likewise, short-term letting can make a significant economic contribution, providing jobs and income in areas where the economy rests on the single pillar of tourism. This is especially so as many of the jobs in the primary rural industries of fishing, farming and forestry are long gone.

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There are fears that a heavy-handed approach to curbing numbers of second homes and reducing short-term letting could have an adverse effect on fragile rural economies, whilst doing little to alleviate the shortage of affordable housing.

It is this poorly performing rural economy that gives rise to at least one factor in the problem of affordability, which is that rural incomes tend to be well below the national average. For example, while much of the property in rural Argyll costs no more than national averages, it is often unaffordable for locals because of poorly paid and insecure or seasonal work.

Whilst it is possible to cite exceptions, where house prices are high by any standards, the problem of low rural incomes is rarely mentioned. In that sense, given that revitalising the economy of the Highlands and Islands and stemming the migration of young people was a large part of the raison d’etre of the old Highlands and Islands Development Board and its successor organisation Highlands and Islands Enterprise, they have to be seen to have largely failed in this. Take Inverness out of the Highlands and Islands economic equation and the rest, with some notable exceptions, is performing very poorly.

BY far the largest factor is a chronic failure to build a sufficient number of houses, not just in rural Scotland, but across the entire country. House prices are what economists call “elastic”. If there is a shortage of houses the price goes up and if there is a surplus the price falls. When the problem is a shortage of houses, then the solution is to build more houses.

This problem was well described in the 2007 Scottish Government document Firm Foundations. The foreword was written by First Minister Nicola Sturgeon. It rightly asserted that there was an established need to build 35,000 houses per annum across Scotland. At that point the maximum number of new house completions was around 25,000 per annum. In other words, there was a year on year shortfall of 10,000 houses every year.

Sadly we found ourselves almost immediately thereafter in the grip of the credit crunch and banking collapse of 2008 and new house building fell to a fraction of that level. Since then it has recovered somewhat, with new house completions now standing at around 18,000 per annum. This is around half of the requirement indicated by the Scottish Government in 2007. The market is quite obviously not meeting demand and therefore prices have risen accordingly. I understand that banks are now routinely giving mortgages calculated at more than five times the principal salary and three times the secondary salary of a household. But who benefits from this frightening equation?

The situation in terms of new housing completions in rural areas is often worse than this. For example, new housing completions in Argyll and Bute between 2001 and 2009 were 1.2% of the national total, despite Argyll and Bute then having 1.9% of Scotland’s population. Thus there was a year-on-year shortfall in that area which was significantly more than the national shortfall.

IT is little wonder then that Argyll and Bute’s population has been falling for many years, more so than almost any other part of Scotland. We have quite literally been exporting our affordable housing problem and the population now stands at 1.7% of Scotland’s total, with predictions from Registers of Scotland that it will fall much further. Ultimately the continuing export of young people and the in-migration of older retired folk will bring a whole new set of profound public policy problems. This problem affects all of the Highlands and Islands, but is most acute in Argyll and Bute.

​The problem is not restricted to Scotland. Kate Barker’s 2004 report indicated a similar problem south of the Border. The Barker report, the Scottish Government’s Firm Foundations report and Madhu Satsangi, Nick Gallent and Mark Bevan’s excellent 2010 book The Rural Housing Question allocate at least some of the blame for our housing crisis to our planning system.

Housing land is rationed through this planning system. In Argyll and Bute a very mediocre building plot for a single home will today set you back at least £100,000. This is despite it having around 10% of Scotland’s land. A percentage of this land has high scenic value. A further percentage has high ecological value. A diminishing slice of land has high agricultural value. That still leaves a huge area where sufficient houses could be built to solve the problem.

Whilst I advocate a less precious approach to rationing our land, especially as Scotland is Europe’s second least densely populated country, at the same time I would hope for a concurrent increase in design and building standards. It is a strange aspect of our planning system that it shies away from aesthetic considerations, perhaps because of the erroneous assumption that one person’s palace is another’s carbuncle. In fact public taste has a remarkable unanimity, and it may well be that the planning system’s reluctance to operate as an arbiter of good design standards is one reason that underlies the phenomena of nimbyism. Few people trust our planning system to deliver high-quality design or public amenity.

Running hand in hand with a planning system which has changed little since its modern inception, enshrined in the UK town and country planning act of 1947, is the equally unfit-for-purpose Housing Need And Demand methodology. This attempts to estimate housing need across our local authority areas. It significantly fails to do so, particularly in rural Scotland where we export our homeless folk with relentless and speedy efficiency. It fails because people seeking homes in rural areas don’t bother to register, since it is obvious that their needs will never be met by housing authorities. It fails because those living discretely and precariously in hidden caravans or unconventional below-standard homes quite understandably don’t wish to draw attention to themselves.

A further problem is that each of the local authorities across the Highlands and Islands have untalked-about policies of centralisation. They reason that concentrating populations in towns will make services cheaper to deliver. Such centralisation is a policy which dare not speak its name but it is nevertheless very real. The value of the sustainability of rural communities, of the Highland way of life, of our culture, or of the quality of education provided in small rural schools don’t figure at all in this arid calculation.

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Likewise, housing associations driven by financial necessity seek economies of scale that are only possible when building large numbers of houses in larger developments.

The proof of this lies in examination of data which show that the populations of towns like Oban continue to grow despite the significant decline in that of Argyll as a whole.

The effect can be seen across our rural hinterlands. Argyll and Bute Council is in the final stages of closing schools in Skipness, Minard and on the island of Luing. When the school closes, the village shop and post office often follow. Many rural communities are on the verge of imminent socio- economic collapse.

Each new house built creates or sustains at least four jobs. Nowadays these jobs can be fulfilling and rewarding. Indirect jobs and economic multipliers are equally significant. Just as we built our way out of our post-war difficulties by erecting houses, it is now time to build our way out of our current economic difficulties. There is no better way of doing so than by building much- needed homes.

It is time to deliver urgent and radical action to solve the rural housing problem.

Mike MacKenzie was a builder for more than 40 years. He was an MSP from 2011 to 2016 representing the Highlands and Islands region. He has lived on the tiny island of Easdale in North Argyll for more than 40 years